Q1 2025 Invesco Ltd Earnings Call
Speaker Change: Thank you for standing by and welcome to Invesco's first quarter earnings conference call. All participants will be in a listening mode until the question and answer session.
Speaker Change: At that time to ask a question, press star one. This call will last one hour to allow more participants to ask question one question and a follow up can be submitted per participant as reminded today's call is being recorded. Thank you very much.
Speaker Change: Now I'd like to turn a call over to get, excuse me, Greg Ketron and Vesco's Head of Investor Relations. Thank you, you may begin.
Speaker Change: Hey, thanks, Cedric, and to all of you joining us on the Invesco's Invesco Ltd
quarterly earnings call.
Speaker Change: In addition to today's press release, we have provided a presentation that covers the topic so we plan to address us.
Speaker Change: The press release and presentation are available on our website, Invesco Ltd.com.
Speaker Change: This information can be found by going to the Investor Relations section of the website. Our presentation today will include four looking statements and certain non-gamp financial measures. Please review the disclosures on slide two of the presentation regarding these statements and measures. Thank you very much.
Speaker Change: as well as the appendix for the appropriate reconciliation to gap.
Speaker Change: Finally, Invesco is not responsible for and does not edit nor guarantee the accuracy of our Erniecella conference transcripts provided by third parties, the LA authorized webcasts are located on our website.
Speaker Change: Andrew Schlossberg, President and CEO , and Allison Dukes, Chief Financial Officer, will present our results this morning. Then we'll open up to call for questions. I'll now turn the call over to Andrew. Thank you, Greg, and good morning to everyone. Please, to be speaking with you today.
Speaker Change: Not only about our Q1 results, but also the significant developments that we announced in our ongoing relationship with Mass Mutual, which we are very excited about.
Speaker Change: Allison and I will walk through the details of this new strategic product distribution partnership and the $1 billion repurchase of preferred stock a little later in the call.
Speaker Change: In recent quarters, I've been commencing our earnings calls with a recap of our strategic focuses in advantageous market position as seen on slide three of your presentation. Thank you very much.
Speaker Change: During this period of uncertainty in capital markets and economies around the world, I cannot think of a more pertinent time to highlight our position and our steadfast focus.
Speaker Change: Our strategic priorities were conceived with conviction that regardless of near-term market volatility, cyclical, structural or fundamental developments, our focus would leverage the best of Invesco, ignite our growth engines, and deliver durable results.
Speaker Change: The hallmarks of the global Invesco platform place us in the position of strength to navigate the current operating environment. Our geographic diversity and local presence of the differentiator across the Americas, Amia, and our significant and unique Asia-Pacific profile.
Speaker Change: Furthermore, our broad range of public and private market portfolios and active and passive multi-asset range of capabilities provides the opportunity for us to stay closely connected to clients and capture expected reallocations in their portfolios.
Speaker Change: Furthermore, our diverse profile provides a more resilient asset flow, revenue, and profit growth profile.
Speaker Change: Our strategic clarity has helped us drive organic roads through various operating environments and continue to prove effective in the first quarter. We generated $17.6 billion in long-term that asset inflows or a 5.3% annualized growth rate.
Speaker Change: And we delivered strong profitable growth with adjusted operating income up 18% and operating margins expanding over 330 basis points when compared to the same quarter last year.
Speaker Change: Furthermore, against the backdrop of a turbulent start of the second quarter, our diversified platform provided some resilience in our asset flows and an ability to use our global scale for the benefits of our clients and our shareholders.
Speaker Change: Turning to slide 4, I'll cover our first quarter flow performance by Invesmic capability and provide some additional context in which to think about the new, uncertain operating environment that we have now entered.
Speaker Change: Before I begin though, I want to point out a change we have made to the reporting of our investment capabilities to isolate the performance of our China JV in India business. Thank you for your time.
Speaker Change: It's important to note that this line item now only represents products managed through our China JV and India business .
Speaker Change: The approximately $10 billion in other assets that were previously in the Asia-Pacific managed capability, but not managed directly through the JV or India are now allocated to the representative investment capabilities with the majority being allocated to fundamental equities. [inaudible]
Speaker Change: We made this reporting change to better reflect how we view our business and the unique dynamics in the Asia Pacific region where we are increasingly able to bring more international products managed outside of the region to our clients in these local markets.
Speaker Change: A good example of this is our Global Equity Income Fund, managed out of the UK, which has rapidly grown to $14 billion of asset-funded management, predominantly from clients in the Japanese market. We've provided an 8-quarter look back in the appendings of today's presentation to help you align to this adjustment.
Speaker Change: Apparently, we'll continue to report our assets and flows, sourced from clients and in each region, which you can see on page five of the presentation.
Speaker Change: The Asia Pacific and Amir regions account for $276 billion each in asset center management representing nearly a third of the overall company. And between them, they generated $15 billion in net long-term inflows in quarter one. A positive trend we've seen in the past several quarters. [inaudible]
Speaker Change: This further highlights the importance of our local profile in key markets around the world.
Speaker Change: Shifting to our recent business results, the year started with a risk on client sentiment, which shifted to a more cautious stance at the end of the quarter continuing through April. By illustration, money markets for the industry recently topped seven trillion dollars, a record level for the asset class.
Speaker Change: Thus far in April , we've seen investors largely stay invested, but they remain more muted with new capital deployments as they rethink their asset allocations.
Speaker Change: Despite the volatility, we continue to see strong client activity in the first quarter with significant growth across channels, at the classes and product vehicles.
Speaker Change: A key headline for us with the funding of a $10 billion mandate to deliver a range of customized fixed income portfolios for the People's Pension Fund which is one of the largest master trusts in the United Kingdom. No.
Speaker Change: 6 billion dollars of this mandate funded in the first quarter with the incremental $4 billion funded during April . This is an important mandate as we continue to build Invesco's leadership in the retirement markets in the UK and globally.
Speaker Change: Our global ETF and index platform continued to produce strong results recording 13% annualized
Speaker Change: Organic Road in the first quarter. More recently, in the March timeframe and continuing into April , ETF demand has cooled as global financial markets experienced increasing volatility.
Speaker Change: That said, we have continued to see our ETF flows broaden by asset class and factors across our clients in America, Amia, and Asia.
Speaker Change: Strong ETF growth in the US market was augmented by another solid quarter for growth in Amia, where we saw $8 billion in net new ETF flows.
Speaker Change: Topnet flowing products in the U.S. were led by our QQQM with the near record flow of $4 billion.
Speaker Change: Additionally, our factor suite drove significant net flows as precision investments become an even more critical buying decision. We continue to innovate in the ETF space, launching three new active ETFs in the quarter, with plans for increased expansion this year.
Speaker Change: Further, our QQQ ETF was successfully listed on the Hong Kong Stock Exchange in February . This launch marks the first cross listing of Invesco QQQ outside of North America and represents a milestone in the expanding market for ETFs into Asia.
Speaker Change: shifting to fundamental fixed income. In the current environment of uncertainty and tight valuations, there is caution around risk-taking. We saw this play out with our fixed income results, particularly during the back end of the quarter.
Speaker Change: But given our range and strength of our fixed income offering, we garnered $8 billion in net long-term inflows with an additional nearly $9 billion in global liquidity flows during the quarter.
Speaker Change: During the period, demand for investment grade and certain municipal bond strategies continued to be strong, and we also had net inflows into our ultra short duration strategies and saw a positive reversal in our stable value platform with net long term inflows for the quarter, a trend line that has strengthened into April . [inaudible]
Shifting to Private Markets,
Speaker Change: In direct real estate, we recorded net inflows of $1.1 billion million dollars.
driven by the funding of a large UK mandate.
Speaker Change: as well as continued inflows into Incraft, which is our real estate debt strategy targeting the Wealth Management Channel, where we continue to onboard new platforms and clients.
Speaker Change: Our real estate team remains very well positioned in the institutional markets, with over $5 billion of dry powder to capitalize on emerging opportunities.
Speaker Change: Our private credit capabilities recorded modest net outflows for the quarter as our market leading bank loan ETF turned from a strong net inflow position at the beginning of the quarter to net outflows in March, which continued into April as recession fears have increased.
Speaker Change: Client interest in private markets remained high, and we expect to see continued activity in the key areas where we focus in real estate and alternative credit, including the advancements announced today with our partnership with mass mutual and bearings. Thanks.
Speaker Change: Moving to our China JV and India Capability, we saw continued net long-term inflows of $2.2 billion, which was led by fixed income and augmented by continued growth in ETFs, which had been gaining traction in China.
Speaker Change: Well, six new products were launched in our China JV this quarter, our organic growth in this market was largely driven by existing products, which is a good sign for the strength of our platform. [inaudible]
Speaker Change: Furthermore, within these markets we've seen resiliency thus far in April , with continued cognitive, organic flow growth in these local fund ranges.
Speaker Change: Clearly, the most recent, the heightened trade tensions have created an overhang for the domestic Chinese economy
Speaker Change: The continued anticipated government stimulus, heightened domestic consumption, and reforms on social service will have an impact on the development of capital markets and the retirement system, both of which are benefits for our domestic to domestic business.
Speaker Change: Turning to our multi-asset-related capabilities, we saw net-long-term outflows of $1.1 billion to driven by our global disparity strategies.
Speaker Change: Finally, the relative pressure on fundamental equities has continued. We saw outflows in our global equities in developing markets funds in the US region, but importantly by contrast in our AMIA and Asia-Pacific regions, we had modest net inflows in fundamental equities, which is an important change in its trajectory.
Speaker Change: Overall our focus will remain on delivering strong industrial performance and gaining market share and key fundamental equity categories in which we compete.
Speaker Change: Moving on to slide five, as mentioned earlier we provide an alternative aggregation of our AUM and our flows to provide additional context for our business results.
Speaker Change: I've covered most of the key highlights, but I will reiterate that the diversity of our asset flows across geography, channel, and investment style provide a balance to market conditions and an ability to meet a range of playing needs, which is an important part of our organic growth potential through various market cycles.
Speaker Change: Moving to slide six, which shows our overall performance relative to benchmarks and peers, as well as our performance in key capabilities, where information is readily comparable and more meaningful to driving results. [inaudible]
Speaker Change: Investment performance is key to winning and maintaining market share despite overall market demand.
Speaker Change: Achieving first quartile investment performance remains our top priority. Overall, roughly half of our funds are performing in the top quartile of peers across the three and five year time horizons.
Speaker Change: Further, over two-thirds of our AUM is beating its respective benchmarks over these measurement periods.
by moving on to slide seven.
Speaker Change: Two important strategic priorities for Invesco have been expanding our footprint in private markets, particularly with wealth management clients, and ensuring that we have balance sheet and capital management flexibility to continue to invest in our growth and deliver shareholder returns.
Speaker Change: The partnership we announce today with MS Mutual Embarrassings for private market, product development, and distribution in the U.S. wealth management market and the repurchase of part of our preferred stock are exciting development and driving these strategic priorities for the benefits of our clients and our shareholders.
Speaker Change: and it also demonstrates the commitment, strength and strategic nature of our relationship with mass mutual. The near-term focus of our partnership with bearings will be on delivering, differentiated, and industry leading private credit-oriented income solutions.
Speaker Change: In product structures suitable to reach a wide set of our U.S. wealth management clients
Speaker Change: We're going to leverage both Invesco and Barring's capabilities in global private credit and public fixed income . .
Speaker Change: The partnership is going to rely on Invesco's deep client relationships in the US wealth management channels for our distribution and the extensive product structuring and unique asset allocation capabilities of both firms. [inaudible]
Speaker Change: We're also excited that mass mutual intends to support this initiative with an initial investment of $650 million in seed and co-investment capital to accelerate bringing these initial and innovative solutions to our clients.
Speaker Change: This augment best mutual is previous commitments to Invesco's private market and other strategies, which is exceeded 3 billion in total . .
Speaker Change: Today's announcement of this partnership with an institutional private markets leader like Barrains.
Compliments nicely the existing strengths.
Speaker Change: and will allow us to expand the existing real estate, alternative and private credit strategies that we currently have in market for wealth management clients in the United States.
Speaker Change: It also demonstrates our ongoing commitment to look for opportunities to broaden our private market offerings to meet client needs across all market cycles and across the full spectrum of sectors and geographies.
Speaker Change: With that, I'm going to turn the call over to Allison to discuss the important aspects of our announcement with mass mutual including the details and benefits of the $1 billion repurchase of preferred stock and also our financial results for the first quarter. I look forward to your questions.
Allison Dukes: Thank you, Andrew, and good morning everyone. I'll start on slide 8 with the strategic rationale and impact of the $1 billion repurchase of Invesco's preferred stock.
Allison Dukes: We're very pleased that we were able to reach an agreement with Mass Neutral to repurchase 25% of the preferred stock, which they hold. There are a number of advantages for Invesco and being able to repurchase the stock. We'll be funding the repurchase with committed, floating rate three and five year bank term loads. We're very pleased that we were able to reach an agreement with Mass Neutral to repurchase 25% of the preferred stock.
Speaker Change: The have a rate in the five and a half to five and three quarters range based on sofa today, or an after tax cost in the 4.2 to 4.4% range.
Speaker Change: We expect the transaction, both the repurchase and financing will close in May. The transaction will be earning the creative in the second half of this year, and the accretion will increase over time as we pay down the terminus.
Speaker Change: Ultimately, once the loans are repaid, we expect the EPS accretion related to this transaction will reach 13 cents on a run rate basis.
Speaker Change: It's on our projected future cash flows. We expect to have the lens fully repaid by mid to late 2029 .
Speaker Change: and also anticipate paying the loans off earlier, should cashless provide the opportunity to do so.
Speaker Change: By repurchasing the preferred stock, we will save $59 million in annual preferred stock dividends that become earning available to common shareholders.
Speaker Change: And while the initial annualized barring costs associated with the term length will be in the $40-$45 million range after tax, this will decrease as the loans are paid down through future cashless.
Speaker Change: The terms that conditions are similar to our floating-rape revolving credit facility and they're pre-payable at any stage with no make-hold fees . . . . . . . .
Speaker Change: Our balance sheet flexibility will be enhanced by the repurchase and the sense that we are pulling forward a billion dollar reduction and the preferred stock that is otherwise non-collable until May of 2040.
Speaker Change: This will enable us to further de-leverage and increase balance sheet flexibility near our term.
Speaker Change: It's important to note that our capital deployment priorities remain intact.
Speaker Change: We anticipate ample cash flow capacity to repay the bank's term loans and a $500 million senior note that matures in January of 2026 without restricting our current capital deployment priorities.
Speaker Change: These include continued investment in growth initiatives, regular share repurchases, and modest dividend increases as underscored by our announced common dividend increase today.
Speaker Change: We do expect that our cash and cash equivalents will remain near $1 billion going for it.
Speaker Change: It's also important to note that the Repurchase Agreement with Mass Mutual provides for discussions regarding future repurchases of the remaining $3 billion of preferred stocks.
Speaker Change: On the next slide, we show the expected progression of the EPS accretion through time that the term loans are repaid in 2029, and the expected run rate EPS accretion after the term loans are fully repaid.
Speaker Change: There is a 15% premium being paid to mass neutral to repurchase the $1 billion of preferred stock based on the present value of a 5.9% dividend rate being eliminated 15 years ahead of the first call date.
Speaker Change: The premium will be included in our second quarter gap results, but it will not impact our adjusted operating results [inaudible]
Speaker Change: We also show the expected impact the repurchase will have on our leverage ratios and the progression of our depth by maturity.
Speaker Change: Looking at the leverage ratio, excluding the preferred stock, we do see a near-term increase in leverage from the term loads, but to a very manageable level near one time followed by significant improvement as we repay the loans.
Speaker Change: The change to the leverage ratio, including the preferred stock, is not an impact in near-term as we are effectively replacing the preferred stock with the term lens. However, with this transaction, we're able to meaningfully improve our leverage profile over the next five years in a way we otherwise could not attain without the repurchase.
Speaker Change: The leveraged ratios shown here are pro forma, assuming no change in EBITDAB from what we are reporting as trailing 4-quarter EBITDAB for the first quarter of this year.
Speaker Change: I'll move on to the first quarter financial results on slide 10. We continued to see strong growth in assets under management during the first half of the quarter before weaker markets set in during the second half of the quarter.
Speaker Change: Total AUM at the end of the quarter was $1.84 trillion, eerily flat to the end of the fourth quarter of 24, and $182 billion or 11% higher than the end of the first quarter of 2024.
Speaker Change: Average long-term assets under management were over $1.3 trillion, and increased 1% over last quarter, and 14% over the first quarter of last year.
Speaker Change: Growth and assets under management during the first quarter was mainly driven by net-long-term inflows, net inflows into our Q2Q ETF, net inflows into money market funds, and positive FX impacts. The impact of market declines in the latter half of the first quarter offsets this growth by quarter-end.
Speaker Change: Net Long Termine slows driven $18 billion increase in AUM during the quarter, representing an organic growth rate of over 5%.
Speaker Change: As Andrew noted, net inflows in our ET app and index capability, excluding the QQ, were over $16 billion.
Speaker Change: Fundamental fixed income contributed $8 billion of net inflows, and the China JBN India added $2.2 billion of net inflows.
Speaker Change: Net Outflows of $7 billion in Fundamental Equities partially offset these inflows. This is the end of the video.
Speaker Change: NetRevenue, Adjusted Operating Income, and Adjusted Operating Margin, all improved from the first quarter of 24, while Adjusted Operating Expenses continued to be well controlled.
Speaker Change: Adjusted diluted earnings per share increased by 33% to 44% for the first quarter versus prior your EPS of 33%
Speaker Change: We continue to strengthen the balance sheet during the first quarter, ending in a net debt position of $143 million, substantially better than the first quarter 2024 net debt position of $362 million.
Speaker Change: We ended the quarter with only $74 million drawn on the credit facility below historical seasonal levels.
Speaker Change: We also continued share repurchases on the first quarter, buying back $25 million.
Speaker Change: We intend to continue repurchasing shares at a similar level on a regular basis going forward. Our board also improved an increase in our quarterly common stock dividend from 20.5 cents to 21 cents per share, reflective of our strong cash position and cashless.
Speaker Change: Moving to slide 11, as we've noted in prior calls, secular shifts in client demand have altered our asset mix and net revenue yields, as our broad set of capabilities has allowed us to capture evolving client product preferences. This dynamic has been increasingly reflected in our results.
Speaker Change: Quiet demand has led to continued diversification of our portfolio, a trend we have seen for a number of years now.
Speaker Change: As a result, concentration risk and higher fee fundamental equities and multi-asset products has been reduced
Speaker Change: The firm is increasingly better positioned to navigate various market cycles, events, and shifting client demand. Consistent with prior quarters, current net revenue yield trends are included on the slide. The ranges by capability or representative of where the net revenue yield has ranged over the past five corners.
Speaker Change: We note the net revenue yield drivers and wear on the range the yields have trended more recently . .
Speaker Change: To provide contact for the net revenue yield trend during the first quarter, our overall net revenue yield was 23.5 basis points, including the impact of two fewer days in the first quarter compared to the fourth quarter, which accounted for a half a basis point or 0.5 tenth of a basis point of the decline. Thank you for your time.
Speaker Change: Excluding the day count impact, the net revenue yield declined six tenths of a basis point compared to the fourth quarter yield of 24.6 basis points [inaudible]
Speaker Change: The exit net revenue yield at the end of the first quarter was 23.8 basis points, only two tenths of a basis point lower than the day count adjusted net revenue yield for the first quarter of 24 basis points.
Speaker Change: Turning to slide 12, net revenue of $1.1 billion in the first quarter was $55 million higher than the first quarter of last year, a 5% increase.
Speaker Change: Investment Management fees were $59 million higher than last year. Gid and Treats was driven by higher average AUM partially offset by the AUM
Speaker Change: Higher performance and other fees were offset by lower service and distribution fees and higher third party expense
Speaker Change: Operating expenses continue to be well-managed, but total-adjusted operating expenses only $2 million higher for a three-tenth of a percent from the first quarter of last year.
Speaker Change: The Quential Quarter adjusted operating expenses were $8 million lower, despite seasonal expenses and compensation due to payroll tax and other compensation-related expense resets that typically occur in the first quarter.
Speaker Change: Declines the Marketing, Property Office and Technology, and GNA, offset the increasing compensation expense on both a year-over-year and sequential purposes.
Speaker Change: We did have $7 million of non-recurring expense benefits in the first quarter that mainly impacted GNA expenses.
Speaker Change: Alpha platform implementation costs of $13 million were in line with our expectations for the first quarter and consistent for the $14 million incurred in the fourth quarter. [inaudible]
Speaker Change: We did move the small first wave of AUM on the Alpha platform in the fourth order of 2024. Feeds paid on the assets under management that were transitioned over in the first wave were nominal expense wise in the first quarter.
Speaker Change: As the implementation continues, we expect Alpha related one time implementation cost to be in the $10 to $15 million range next quarter .
Speaker Change: Regarding operating expenses for 2025, we're focused on discipline expense management.
Speaker Change: Given the recent market volatility, it's become more difficult to provide specific guidance on operating expenses, but we're managing it carefully day by day. In terms of expense flexibility, without any management intervention, our expenses are approximately 25% variable. [inaudible]
Speaker Change: With Management Intervention, some of which can take several corners to fully realize the variability increases to 30 to 35%
Speaker Change: First quarter, you're over your positive operating leverage with over 500 basis points.
Speaker Change: Driving a $53 million or 18% increase in operating income, and over a 330 basis point improvement in our operating margins to 31.5%.
Speaker Change: The effective tax rate was 24.4% in the first quarter. We estimate our non-GAAP effective tax rate will be between 25% to 26% for the second quarter of 2025, excluding any discrete items.
Speaker Change: The slight increase in the rate is driven by shifted income across tax jurisdictions. The actual effective rate can vary due to the impact of non-recurring items on pre-tax income and discrete tax items.
A wrap-up on Slide 13
Speaker Change: As I noted earlier, we continue to make progress on building balance sheet strength in the first quarter. We ended the quarter with a net debt position of $143 million significantly better than the prior year first quarter net debt level of $362 million. We ended the quarter with a net debt level of $362 million.
Speaker Change: We ended the first quarter with just $74 million drawn on our credit facility, substantially lower than what we have drawn historically with the first quarter being a seasonally high cash usage quarter.
Speaker Change: Our leverage ratio has continued to show improvement versus a year ago. With the leverage ratio excluding the preferred stock at 0.3 times versus 0.54 times a year ago and including the preferred going from 3.36 times a year ago to 2.77 in the first quarter.
Speaker Change: We expect continued Sherry purchases, buying back $25 million or $1.5 million shares during the quarter.
Speaker Change: I'm sorry, we continued share repurchases, buying back $25 million, $1.5 million shares during the quarter. And as noted earlier, our board approved an increase in our quarterly comments.
Speaker Change: We intend to continue a regular share repurchase program going forward, and we expect our total rate payout ratio, including common dividends and share buybacks will move closer to 60% in 2025 as we continually evaluate our capital return levels.
Speaker Change: To conclude, the resiliency and strength of our firm's net flow performance is evident again this quarter, and we continue to make significant progress on building a stronger balance sheet enhanced further by the $1 billion refurchase of the preferred stock. We remain committed to driving profitable growth, a high level of financial performance, and enhancing the return of capital to shareholders.
Speaker Change: With that, I'll ask the operator to open up the line for Q and A. [inaudible]
Speaker Change: Thank you. At this time, if you'd like to ask an audio question, please press star one. You will be announced prior to asking your question. Please pick up your handset when asking your question. To withdraw your requests, please press star two. One moment for our first question.
Operator: Okay, now first question comes from Alex Blostein with Goldman Sachs, your line is open.
Alex Blostein: Hey, good morning, everyone, and congrats on the announcement this morning.
Speaker Change: So maybe starting with a strategic update, I would love to get your perspective on how you envision sort of the product and distribution opportunities develop with bearings and mismetrol.
Alex Blostein: Is it more of a gradual product build? So it might take some time to scale or there are places where you guys could see more immediate impact on the business through either kind of a larger sub advisory arrangement or something along those lines.
Yolks, thanks. Hi, Andrew. Let me take that one. And they are...
Alex Blostein: The initial phases of this partnership are going to focus as I mentioned on-
Aries of Private Credit .
Alex Blostein: and we have a few capabilities mapped out that we intend to get to market.
Alex Blostein: In the next little while, but those need approvals, and we need to work through various questions.
Alex Blostein: details. But we see that first phase kind of happening relatively quickly. And then we'll look at at second and third phases over time as opportunities create themselves. We're really going to focus on these private credit opportunities in the US wealth management channel to start.
Alex Blostein: All right, gotcha. Thanks. And then, Alton, what for you on the prep? Nice to see that Don, so...
Speaker Change: Maybe just kind of a couple of comments on what ultimately got mess mutual over the hump to agree to this. And as you think about the remaining I think $3 billion, how are you guys thinking about opportunities to repurchase more? [inaudible]
Sure
Speaker Change: Well, look, I think you can tell from the variety of announcements today and just the partnership we've had with Mass Mutual over the last six years, they're a good partner. And while we do have a contract with them and the preferred is non-collable for another 15 years, they also recognize and understand some of the challenges that the preferred has created in terms of the perception overall and just the coupon itself. And so they've been great partners as we continue to look for opportunities and alternatives.
Speaker Change: to make some progress with the preferred and also even bringing this product partnership to bear through the relationship with bearing. So, it was really multifaceted.
Speaker Change: and I think a real testament to just the strength of the partnership and the commitment that we have to each other.
Speaker Change: As a reminder, they are an 18% common shareholder so they're as invested as everybody else in really continuing to see the stock re-rate and we think this is a positive improvement [inaudible]
Speaker Change: In terms of opportunities we have around the remainder of the $3 billion, I think as we said the repurchase agreement provides opportunities for us to continue to think about ways that we can reduce that in the future in terms that are mutually agreeable to both parties.
Speaker Change: The opportunities we have with the free cash flow that we generate.
Speaker Change: The Rate Environment, which will be relevant to Mass Mutual and to ourself
Speaker Change: and really looking at what's the organic and inorganic opportunity set that's out there. I think what this is a really strong first.
Speaker Change: Step, and we're all very optimistic that this provides opportunities for us to continue discussions in the future.
Speaker Change: Yeah, and just one other thing I'd say is I don't want to have it get lost in this. The commitment from mass mutual to put up to $650 million of capital behind those initial couple of strategies that I mentioned in phase one of this product partnership is not insignificant in helping us. [inaudible]
Get to those US World Platforms more swiftly.
Yeah, no, that's great. Congrats to you, everyone involved.
Thank you.
Speaker Change: Thank you. The next question comes from Craig Siegenthaler with Bank of America. Your line is open.
Craig Seigenthaler: Thanks, good morning, everyone. My question is also in the mass mutual announcement related to the Bairings U.S. wealth partnership. I'm curious, could this potentially be a first step in an Invesco Bairing merger, especially given that your capabilities are complementary?
Speaker Change: We've got a lot to do as two individual companies and I think we've found this.
Speaker Change: This opportunity after discussing ways to get into the U.S. wealth space more productively together and have our complementary capabilities in this particular space come together to put a couple of products to market. And so we're going to focus exclusively on that going forward. Thank you very much.
Speaker Change: Thank you, Andrew. And then, you know, this past quarter we saw EQH take a larger stake.
Speaker Change: in Alliance Bernstein. And, you know, we're watching me ask Mutual, sell part of their preferred. I'm wondering are there any limitations that I'm increasing their 18% common equity stake or voting interest in the past and the future?
Speaker Change: There are some limitations. It's all filed on the Schorr Holder Agreement, which was initially filed with the closing of the Oppenheimer transaction back in 2019. I believe it limits them to 22.5%.
Speaker Change: There are a variety of kind of regulatory considerations around that wide at that level. So there is some feeling there in the Shareholder Agreement as it stands today.
Speaker Change: I don't think anyone should view their agreement for us to repurchase a billion dollars of the preferred as anything other than just continued progress in the partnership on all sides.
Speaker Change: Inclusive of others, Andrew said the continued capital commitment on top of the $3 billion they've already committed and just their real willingness to continue to support Invesco's growth and a variety of facets.
Thank you, Allison.
Speaker Change: Thank you. Next question comes Mike Brown with Wells Fargo Securities. Your line is open.
Speaker Change: Mike, please check your headset. Got a bad connection.
Hi, good morning. Sorry, can you hear me now?
Yeah, we're here. Okay, great. Thank you
Speaker Change: So on the partnership announcement, just give them Invesco and bearings current capabilities.
Speaker Change: Can you just expand on that 650, how will that be used specifically? That's a...
Speaker Change: for example to maybe expand in the investment grade private credit side a bit more and then in terms of the vehicle is just to clarify as a plan to launch like an interval fund type of structure with a public private sleeve and that would then be targeting the below accredited threshold. Thank you.
Yeah, let me try to address both questions. The initial C-capital is to
Speaker Change: Launch and instigate the initial product or two that will bring to market exclusively. That's what it's meant to do. And just it's not new capabilities for either firm and just to clarify, you know, the strengths of bearings and the things that we're going to use in these capabilities include in the future.
Special League Finance and Special Situations.
Speaker Change: You know, in the higher upper end, part to direct lending, where we invesco really aren't today.
Speaker Change: and it's going to compliment where we are today, which is in distress credit, lower mid-direct lending, bank loans, CLOs, and real estate debt. So think of it truly, it's just complimentary investment capabilities.
Speaker Change: Seated with this initial capital or instigated with this initial capital or
Speaker Change: and brought into a multi-asset type solutions to the marketplace in terms of structures and the like.
Speaker Change: Not something we can get into today, you know, they're not, these products aren't filed and things like that, but do think of them as...
Speaker Change: as vehicles that will be relevant, credible and easy to attain by, you know, the wealth management platforms that we serve today and similar to strategies we have out there in market already in the real estate and alternative credit space.
Okay, great [inaudible]
Speaker Change: Is that kind of a baseline? How should we think about what expenses could look like for the year? Could they be kind of flatish year over year? Does that variable component give you the ability for them to actually be a bit lower year over year? Just some helpful thoughts, some thoughts that would be helpful. Thank you.
Speaker Change: Yeah, but maybe I'll take maybe a couple of component pieces just to think through all of that. I'd say compensation of course is the most variable component of our expense basis you think about the revenue environment. Let's get started.
Speaker Change: I think, you know, our compensation as a percentage of revenue has been running in that 43 to 44% range. That's probably a reasonable expectation of a range as I think about the revenue environment for this year is revenue were to stay flat .
Speaker Change: Improvement or the deterioration in the revenue environment, we do intend to continue moving forward in the implementation of alpha, so that-
Speaker Change: Doesn't have a lot of variability to it. You know, everything else, we're certainly looking at all of our expenses from a very disciplined perspective as you would expect in this revenue environment. And I want to be careful to read too much into three weeks of volatility. It's been three pretty volatile weeks.
Speaker Change: But it remains to be seen how things will unfold from here. Nonetheless, we're being very thoughtful about every element of discretionary expenses we have. Think about it from everything from travel and entertainment. Just slowing down hiring all the things we can do to just really slow the growth of our spin space.
Speaker Change: So if revenue is flat from here, could expenses be flat? It's not an unreasonable expectation, but we're going to be looking at everything we can do to continue to pull forward some of the transformational opportunities. We've done a lot of work as you know over the last few years on our...
Speaker Change: Simplification of our organization. We're working on that all the time. We came into this year continuing to make progress on that. We're going to...
Speaker Change: We're going to stay focused and execute and accelerate with speed wherever we can so we can continue to recognize some real discipline expense management which we think has really become a hallmark of our operating performance for a number of years now.
Great. Thank you very much.
Speaker Change: Thank you. Thank you. The next question comes from Dan Fannon with Jeffries, your line is open.
Dan Fannin: Thanks. Good morning. Andrew, you talked about some of the trends in April . If you could talk more broadly, I think you mentioned China was positive, but as you think about other regions, climate conversations and this type of market backdrop, how you're seeing things unfold and maybe also just from a backlog perspective, you anticipate.
Speaker Change: funding to maybe slow it as a result of all the uncertainty. [inaudible]
largely stay pretty well invested.
but they are absolutely moving to a more defensive stance.
as relates to their How They're Deploying New Capital. .
Speaker Change: You know, they're kind of rethinking <expletive> allocations, but also trying to assess the market environment as I mentioned in my comments earlier I mean this is where the diversified nature of our business is really helpful.
Speaker Change: and it puts us in the position to navigate the current operating environment and capture flows as investors gain clarity. What I would say is that in the fixed income, the focus really has ...
Remained more on the shorter duration side. All right.
Speaker Change: and with equity strategies in the U.S. facing headwinds, what we are seeing is a broadening and many instances a more positive investment flow environment in places like Europe and in Asia, which is going to be a helpful midagent for some of those headwinds in the U.S. that you can see on a daily basis. Thank you.
Speaker Change: I'd say on the institutional side of the business it remains pretty resilient and frankly pretty positive. We funded the key retirement mandate that I mentioned in the UK but also seeing strength in our US retirement platform places like stable value and that that resiliency and those commitments haven't changed.
And then I think China, what I'd say is that...
Speaker Change: Given that our business is a fully domestic to domestic business as you know,
and then we're in very...
Speaker Change: strong position in that marketplace, a known brand. We've seen a lot of resiliency in the region with actually positive organic flow growth into April and in April, which is helping to offset some of the market declines.
Speaker Change: So it's a mixed bag and we'll see when we release in a couple of weeks where the month shakes out.
Speaker Change: Patel, Paul, and then Allison, there's one more on expenses. You've mentioned a one-time benefit of $7 million in G&A, and you also remind us how much of the seasonal kind of comp was in first quarter to try to get a sense of just the starting points of the jumpoff points for 2Q.
Speaker Change: Sure. On the second question, Siegenthal usually runs about $15 million higher in the first quarter. And then again, I think about that comp at the percentage of revenue guidance on that 43 to 44% context since the run on the higher side would revenue down.
and, of course, Lawrence Revenue increases. [inaudible]
Speaker Change: on the $7 million one time. Yes, it's predominantly in GNA. There was some in property office and technology too. And so as you think about those two line items, a quarter of a quarter, expect some increase just removing those one time as we roll into the second quarter.
Craig, thank you.
Speaker Change: Thank you. The next question comes from Brian Bedell with Deutsche Bank, your line is open.
Brian Bedell: Well, great. Thanks. Good morning. I progress also on the partnership with Massachusetts. Maybe just on that, can you talk a little about the economic participation for Invesco? Is it simply a matter of...
Brian Bedell: The assets that you are managing in the partnership and you're getting...
Brian Bedell: You know, your fees for that to the economics, or are there other sharing arrangements and do you expect your asset management participation?
Speaker Change: You know, to be commensurate with bearings were, you know, might it skew, you know, one way or the other? And I don't know if there's any guideposts of how large you think this, you know, this could, could end up being of the next, say, a couple of years, maybe it's too early for that. [inaudible] a couple of years
Thank you for that one.
Speaker Change: Yeah, thanks for the questions. The partnership is pretty straightforward just to put a line under it. These are going to be Invesco products that we're going to bring to market.
Speaker Change: Under the U.S. Wealth Management Channel, with parts of the assets managed by bearings and parts by Invesco, we'll be sharing management fee revenues in an undisclosed way.
So we didn't disclose the terms of the arrangement. [inaudible]
Speaker Change: But Invesco is going to be the distributor. Invesco is going to be the product operator. You know, we'll be compensated for that as well.
Speaker Change: in terms of the growth that's really too early to say. All right.
Speaker Change: We think these are compelling, it's going to be compelling offerings, private credit broadly in an allocated way.
Across All All.
Speaker Change: Elements of the Spectrum that I described before, inclusive of things like real estate debt.
Speaker Change: All the capabilities that we can put forward to those advisors who are looking for things like this. So, we'll continue to update you as this develops over the next several quarters, but too early to describe how big this could be. [inaudible]
Speaker Change: within those local regions, you know, given the, you know, all of the tariff negotiations that are going on in any kind of, you know, sentiment globally towards investment products and investment in U.S. products.
Speaker Change: Okay, yeah, thanks. Maybe just before we discuss how it's looking right now, just a reminder, $550 billion of our assets.
Speaker Change: You know, our our held by clients outside of the United States and that's evenly dispersed between Asia Pacific and Amia and as I mentioned Asia Pacific's been a fast grower for Invesco and a really differentiated position because we're so local and because we've been so long term in those markets. [inaudible]
and the capabilities that are being...
Brought to those markets are both domestic and international capabilities [inaudible]
Speaker Change: And then Amia, where we've been for a long, long time [inaudible]
Speaker Change: has started to show us a very good growth over the last few quarters from an asset flow perspective, strong investment performance, and a similar sort of local profile that I was mentioning around Asia. So we were really well positioned in those places and those businesses have been moving forward.
Speaker Change: So as the current market environment takes hold, that diversity I think we think is really going to continue to pay off and as people continue to invest internationally but also invest in their domestic markets. This will be good for the resiliency of Invesco. As I mentioned on our April flows it's still a little bit early to get a full picture of things.
Speaker Change: But we will say in the short run, the markets outside of the US in terms of asset flow and resiliency have been better than the flows in the United States. But there's just so many moving parts right now that it's hard to call things a trend.
Yeah, that's super helpful. Thank you.
Speaker Change: Thanks, Fred. Thank you. Our next question comes from Bill Katz with TD Cowan. Your line is open.
Bill Katz: Sort of curious, there's an increasing focus for that market to potentially have great allocation to alternatives. I was wondering if you could talk a little bit about how your position, both maybe the opportunity set or through any threats, to the extent that that would move forward and sort of see it pick up in all allocations. Thank you.
Speaker Change: Yeah, the retirement markets have been a focus for, you know, Invesco for a long time and we're an investment only manager, meaning we know we don't record key basettes and, you know, we really are not a target day player per se. So the opportunity is, I think they're endless really that if an as alternative in private markets can find their way into applying contribution plans in the US or around the world, you know, we have active we have the active strategies to do that that are stood up. The partnership today could present even
Speaker Change: and more opportunities for us to create product for that market. And we're going to utilize the relationships we have with plan sponsors and consultants and record keepers and other inputs into that market to find a way to be a part of whether it's growth and target date for alternatives or some other vehicle types.
Speaker Change: We have all the requisite pieces to do it. And I think that's not just a U.S. phenomenon, that's a that's a global phenomenon and I think examples of
Speaker Change: that we talked about today of our growing retirement business in the United Kingdom or advances we're made in the United States.
Speaker Change: or in the long run in Asia Pacific, if and as alternatives find their way into applying contribution, we'll be right there.
Speaker Change: Okay, thank you. This is a follow-up. I think you mentioned your prepared commentary and not surprising that the institutional decision makes has been pushed off a little bit. I was wondering in those conversations that you are having with them, are allocation dynamics shifting and if so, where might they be shifting?
Speaker Change: I mean, it's really a bit early to say. I mean, one of the key things is the funding that we expected in April happened.
and so they're not stopping their fundings. [inaudible]
You know, I think-
Speaker Change: During periods like this, we've seen in the past in conversations we're having [inaudible]
Speaker Change: You know, they tend to pause a little bit in thinking about their future outside allocations [inaudible]
Speaker Change: Yeah, I think they're all trying to digest the same things we're all trying to digest.
Speaker Change: The conversations are really active. They're looking for consultation, and they're looking for partners that can bring a range of solutions to them custom or otherwise. And that's generally what we're seeing in the market. It's too early to say exactly where they're placing bets because they're not making those changes. Thank you very much.
Thank you.
Speaker Change: Thank you to the next question comes from Patrick Davitt with Autonomous Research Your Line Is Open.
Speaker Change: Good morning everyone. I have a follow-up to Brian's question.
Speaker Change: Chatter, I think he was trying to get to this, but Chatter about large institutions pulling money from US institutions for either ESG or just anti-American sentiment. I think you guys actually won some of that money in motion to your point earlier, so could you speak to what extent?
Speaker Change: You are hearing any of those conversations, how non-US investors are evaluating those issues and to what extent you believe having that established local presence is enough to avoid being painted with the quote-unquote US manager tag. Thank you.
Yeah, I mean, part of it's...
Speaker Change: You mentioned in your answer. I mean, we're winning mandates. So we really haven't seen that. And I, you know, we haven't heard any of that sort of anti rhetoric. What I will say though is the broadening out of the markets. And where people are looking at valuations in Europe or where they're looking at diversification into value or into domestic markets away from where money has, you know, predominantly just been very, very focused in the US equity markets, large cap growth. You mentioned in your answer. You mentioned in your answer. You mentioned in your answer.
We're seeing people rethink those allocations but I-
Speaker Change: We have not heard it's an anti-movement, it's a broadening out of markets It's, um,
Speaker Change: That's to the point of our local press in these local markets. We should do just fine in terms of capturing some of that sentiment of flows trying to even out and frankly it's a good thing for Invesco because we have such a diverse.
that started locally...
Speaker Change: We've got that broad set of diversified capabilities and I think that's important as well as you think about some of the trends that are out there in the macro environment right now. Yeah, I mean seeing positive flows in that market in April is one good sign. Yeah, you do.
Speaker Change: Okay, helpful things. And obviously you've been more focused on fixing the balance sheet organic growth but historically big dislocations like this have opened up rare in organic opportunities for asset managers. Thank you very much.
Speaker Change: So could you update us on your willingness to do a larger triangle action if something came up? And if so, what would be at the top of your wish list? We're kind of a once in a lifetime type deal. Thank you.
Speaker Change: Well, I think nothing's changed in terms of our perspective around not in the way we've entered it probably for a few quarters, even a few years now. I mean, we we're always looking and so I would say our willingness has not changed.
One of the things we are always focused on. [inaudible]
Speaker Change: is overlap with existing capabilities and really needing to make sure we're being thoughtful about where we've got capability gaps. We have been consistent in saying we probably don't have our suite of products as fully built out as we would like in areas like private credit and infrastructure. I think the partnership today is good progress towards actually starting to build that out in a slightly an organic way. [inaudible]
Speaker Change: It's a mix of an organic and an organic, I would say opportunity as you think about how we can continue to fill those gaps in. So I don't think anything has changed in our willingness. The announcements we made today in terms of the balance sheet are designed to give us additional capacity.
Speaker Change: By pulling forward this billion dollars that we otherwise could not have done anything about for 15 years it gives us an opportunity [inaudible]
to fully transition that away over the next few years. [inaudible]
Speaker Change: It gives us increased flexibility and opportunity in our ballot sheet to do something larger and more substantial on the and organic side so I would say nothing's changed if anything the announcements today underscore our forward focus on making sure we've got the opportunity to be opportunistic.
Speaker Change: You know, we really like and we're really excited about this with mass mutual invariance and the ability to do alliances and things like this like we've done in in geographic markets around the world. You know, our great opportunities and we're going to continue to be to be looking to advance those opportunities.
Speaker Change: Okay, the next question comes from Ken Worthington with JP Morgan, your line is open [inaudible]
Ken Worthington: Hi, good morning and thanks for taking the questions. So maybe first, Allison, you mentioned the prepared remarks, the ability to make expenses more variable if needed. Is this largely comp, and how far can you take it and given that the...
Ken Worthington: Marketfall, Tully, or market levels have been more recent but deeper correction. Have you already started to take the steps to adjust to the more challenging environment?
Ken Worthington: Yeah, maybe kind of doubling back on that. So what we noted in the prepared remarks is that the variability in our expense.
Ken Worthington: Base. There's no management intervention. It's about a 25% variable component. That's without us doing really anything. And that primarily comes out of compensation. There are some other elements of operating expenses that are variable in nature, but it is largely driven by compensation.
Ken Worthington: as meaningfully as possible and as quickly as possible in light of the volatility in the revenue line that we've seen just over the last few weeks.
Ken Worthington: But in addition to all of that, as I said earlier, we're going to stay focused on pulling forward some of the transformational opportunities that we have had underway for a number of years now. You know, you've seen our sense-base be-
Ken Worthington: Very well-managed over the last several years as we're constantly looking for opportunities to simplify our organization, to create capacity to reinvest that capacity, or perhaps in this environment to delay reinvesting some of that capacity. And those are some of the ways in which we'll continue to manage the expense base.
Speaker Change: Okay, thank you. On the wealth management side with the announcement today...
Ken Worthington: is what you plan to launch different from what you're seeing in the market already either by structure, distribution, or target customer. What we're seeing is maybe more success from the alternative managers sort of launching alternative products into the wealth management channel than traditional asset managers launching alternative product into the wealth channels.
Speaker Change: So, if your products or focus is similar to what's already there, how do you frame what drives success for you, when maybe some of your direct peers have not been as successful going along with this path.
Speaker Change: Yeah, I mean, look, Invesco is a private market player. I mean, we have 130 billion in assets. You know, we've been serving institutions for a long time. What we've done over the last few years is bring those capabilities. Please.
Speaker Change: in Interval type vehicles, and leverage are very, very strong U.S. wealth management distribution relationships that we have, and we have been seeing success.
Speaker Change: in particular with our real estate debt strategy that we mentioned before in-craft. We'll see you next time.
Speaker Change: working through those networks and channels and we going forward expect to
Speaker Change: use capabilities like we described today with Invesco and Barings to bring similar type capabilities with all those same attributes of our distribution, our product structuring, all the education that we have, and the success that we've started to build.
Speaker Change: and so we think those attributes differentiate managers that are going to win and those that aren't going forward into the marketplace and we think we have all those attributes and we're going to continue to progress down.
Okay, great. Thank you.
Speaker Change: Thank you. The next question comes from Michael Cyprys with the Morgan Stanley , Morgan Stanley . Your line is open.
Michael Cypress: Hey, good morning. Thanks for taking the question. Just wanted to dig in for a moment on the SMA platform. Sounds like you guys are having some good traction and success there. I think you mentioned 30 billion of assets, 25 billion or 25% organic growth. Maybe just remind us how many strategies you guys offer in SMAs today, how you see that evolving and if you could just talk about your ambitions. Thanks for taking the question.
Speaker Change: How do you think about meaningfully scaling these capabilities as you look out on the next couple of years?
Speaker Change: Yeah, the growth there has been almost exclusively on fixed income and it's actually one of the reasons [inaudible]
You know, we've been able to grow as that [inaudible]
Speaker Change: We're pretty differentiated in the fixed income space in particular. There's several dozen strategies they're placed on all the well-known platforms.
Speaker Change: You know, some taxable, mostly tax-free, but it's right in the sweet spot it grotes for both SMAs as a vehicle into wealth.
Speaker Change: as well as fixing, coming a little less represented by some of our competitors.
Speaker Change: And so that's where we've been able to pick up a lot of that growth that we expect.
Speaker Change: You know, to continue. On the equity side, we have several traditional fundamental equity strategies, but also tax optimized strategies that we brought to market on some unique indexes. [inaudible]
So it's pretty well placed but...
Speaker Change: I think it's hitting this weak spot of two big trends which are more income-oriented strategies and the SMA vehicle.
Speaker Change: You know, it scales well with deep technology and we've made those investments in in those technology platforms we already have all the requisite distribution. Thank you very much.
and will continue to kind of invest behind the operational...
Speaker Change: Elements of it so that we can get, you know, continue to get incremental margin and profit expansion too.
Speaker Change: Great. Thank you. And then just a quick follow-up on the Alpha implementation, I think you mentioned, Allison, 10 to 15 million range from the next quarter. If you could just remind us how we should think about the cadence of that throughout the remainder of the year and into 26, and ultimately, how do we see the path of that timing for that falling off?
Speaker Change: Yeah, so 10-15-9 is the implementation cost guidance. And in terms of timing of waves as a noted, we moved a small wave over at the end of the fourth quarter. We are expecting to move a second wave of assets onto the platform sometime in the second half of the year. And then timing on the additional waves would progress into and late into 20-26. It could even drag into that first quarter 27. That's what happened.
Speaker Change: So I think we're really looking at 27 before we actually start to see kind of the benefit of reducing some of the redundant seeds of systems that we currently run today.
Speaker Change: So that 10 to 15 continues till early 27, is that right, and then trails off pretty quickly after that?
Speaker Change: That 10-15, we said was an expectation for this year, for 20-25, back in January , we gave the guidance of expect 10-15 million a quarter for this year
Speaker Change: and reiterating that is a good guide for the second quarter. Beyond 2025, too hard to say, as you start to get waves behind you, the nature of the implementation changes, and so we'll update that guidance as we get later into this year.
Great, thank you
Better if we have time for one more question?
Speaker Change: Okay, and last question for today comes from Benjamin Budish with Barclays Capital, your line is open.
Benjamin Budish: Hi, good morning and thanks for squeezing me in. Just one final follow-up perhaps on the Bering deal. Could you maybe talk about the sort of distribution timeline, you know, you have the relationships already with a lot of the platforms, the wires, the RIAs. Once you sort of are able to file a registration statement, how long does it take to start getting the product available on the platforms, when might we start to see some more meaningful inflows? And could you maybe provide some color on the investment required here in terms of advisor education, placement fees, anything like that?
Thank you
Benjamin Budish: Yeah, let me start on the back end. We have everything built out in terms of the distribution, product, structuring, distribution specialists.
Benjamin Budish: and so we're going to leverage off of that complete existing platform that we've developed with private market specialization. So those have already been made.
Benjamin Budish: It's difficult to speculate. I'll say quarters from now. We're also going to look at ways to enhance existing strategies that we have. So some could be sooner than others, but I would think quarters is the best way for you to think about that.
Benjamin Budish: and we'll look forward to giving everybody an update on the next quarterly call.
Great, thanks again for squeezing me in [inaudible]
No problem [inaudible]
Benjamin Budish: Okay. Well, thanks everybody and let me say in closing that we feel very well positioned to help clients navigate the impact of evolving market dynamics and the subsequent changes to their portfolios. As market sentiment has become more uncertain, it's important that we stay close with our clients.
Benjamin Budish: And while we do think that uncertainty creates challenges over the short term, we do believe over the long term the client convictions will strengthen and should create opportunities in the future for greater scale performance.
Benjamin Budish: and approved profitability for Invesco. Given all the work we've done to strengthen our ability to anticipate, understand and meet evolving client needs.
Benjamin Budish: We are very excited for the future of Invesco. I want to thank everybody for joining our call today. Please reach out to our investor relations team for any additional questions, and we very much appreciate your interest in Invesco and look forward to speaking with you all again soon.
Benjamin Budish: Thank you, Nick, it includes today's conference. You may all disconnect at this time.